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 user 2008-06-26 at 12:51:44 pm Views: 58
  • #20122

    HP enticed with $43M to build Ark. facility
    Hewlett-Packard Co. was offered more than $43 million in incentives from state and local officials to build a new customer and technical service center in Conway, according to documents released Wednesday.Details such as the number of jobs, average wages and the company’s investment were blacked out in a memorandum of understanding between the technology company and the state, as well as several attachments. The Arkansas Economic Development Commission released the documents to The Associated Press in response to a Freedom of Information request.The June 17 memo, however, details the the $35.4 million in incentives that the state used to lure the Palo Alto, Calif.-based company to Conway for its new facility. Officials announced last week that the company plans to open the center by the end of 2009 and have its full contingent working within four years.Beebe has contributed $10 million from a fund he controls to help attract new businesses and help existing ones expand to go toward that infrastructure.The document also details $8.3 million in incentives that local officials in Conway offered to HP to open the new center. The local incentives included $2.1 million for the project’s site work and nearly $3 million for transportation corridor improvements to the office park where the facility will be located.

    The company has said it will hire 1,200 people for the new center.
    The Conway Development Corp. has already announced it will provide a $28 million, 150,000-square-foot building for HP to lease.The city also agreed to a 65 percent abatement on property taxes for the facility if HP and the Conway Development Corp. agree — a savings of more than $1.8 million over ten years, the agreement said.The state’s incentive package included tax credits through the Advantage Arkansas program, which provides credits equal to 1 percent of the net new payroll for a period of five years with a minimum annual payroll of $125,000. Officials blacked out the annual payroll increase and the estimated tax credit HP would receive under the agreement.HP will also receive money through the Tax Back program, which grants a refund of state and local sales and use taxes paid on the purchases of construction materials. The company will also receive training assistance, including a reimbursement of training investments between $500 and $650 per position.State economic development officials have traditionally not released documents detailing the incentives offered to companies, citing state FOI law exemptions for documents related to a company’s planning, site location, expansion, operations, or product development and marketing.The incentives agreement includes documents that refer to “Project Sigma,” the code name state officials used for the HP center before it was announced.Joe Holmes, a spokesman for the Economic Development Commission, said the agency decided to release the incentive agreement after open records requests were filed following last week’s announcement.”This is not something we’ve normally released, but when you look at it, there’s very little in there that has not been talked about,” Holmes said.

    Most of the information withheld from the documents released Wednesday detailed the annual payroll, employment figures and some of the specific tax credits HP would receive from the state. Beebe has said beginning pay for the jobs will start above $40,000.The state also required HP to create a minimum number of each year and pay an average salary or else face the possibility of paying back part of the $10 million in “quick action closing fund” offered.The minimum number of jobs, average salary and formula used to calculate any refunds to be paid to the state were withheld from the documents released by the agency.Beebe earlier this week defended the amount of incentives that were offered to HP.”We obviously felt like it wasn’t too much for a project of that size,” Beebe told reporters. “They are looking at a $50 million annual payroll, that’s five times what the quick action closing fund (will provide) in just one year.”